The swap from 249 to 242 is the way to go - did it a couple of years ago - the hard way - learned a lot but in the end it is totally worth it - I have a large bit of it outlined on my car domain page - I had to change the planetary gears in the the 242 to my 249 gears - I reused the front half of the 249 as they are the same front half and I could not get the giant gear ring out of either one. I used a case from an 89 cherokee which had a short shaft 21 spline count input shaft. The 93-98 grand cherokee uses a medium shaft 23 spline count input shaft. 93-94 1/2 uses a thick input spine bearing along with pitch of the gears being different from a 94 1/2 and up gear which uses a thin bearing. There is also the issue of outputs. Starting in 1996 Jeep switched from an internal slip yoke to an external slip yoke for the NP231s and NP242s. The NP249s retained their internal slip yokes throughout the 1993-1998 usage.
The easiest way to do this swap is to find a transfer case from the same year you have and simply swap it in - if it is a 96-98 grand you will need the drive shaft along with it because the drive shaft is a different length for each transfer case. (unless you have a lift then it really doesn't matter) I am not sure which is longer or shorter but I just know they are different lengths. Hope this helps.
will my trans shop know these things. meaning is this a decently known fact that people, whos living is trans and transfer cases, know this? i don't plan on doing this myself. i know the cost is much, but i can get a decent deal from the guy i deal with.
so yeah, anyway, whenever i get to this, i guess just supply him with the driveshaft, SYE?, and the 93-98 t-c?